Real estate isn’t just about the homes we sell, it’s about staying ahead of the changes that impact our clients, our transactions, and our city. If you’re buying or selling a home in Philadelphia, or planning to, there’s an important change going into effect on July 1, 2025 that you need to know about: the City of Philadelphia is increasing its Realty Transfer Tax. Let’s break down what’s changing, what it means for you, and what to expect moving forward.
What Is the Philadelphia Realty Transfer Tax?
If you’ve ever bought or sold property in Philly, you’ve paid the Realty Transfer Tax. This is a tax collected at closing, and is typically split between the buyer and seller (unless negotiated otherwise), based on the sale price of the property.
Up until now, Philadelphia’s city portion of the tax has been 3.278%. Combined with the state’s 1% transfer tax, that brought the total to 4.278%.
Starting July 1, 2025, the city is increasing its portion to 3.578%—raising the total transfer tax to 4.578%.
That’s a 0.3% increase citywide. On a $500,000 property, that’s an extra $1,500 in taxes.
Why Is This Happening?
This increase is part of the City’s investment in Mayor Cherelle Parker’s H.O.M.E. initiative—a $2 billion commitment to affordable housing, housing preservation, and community stability.
The goal is to fund:
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30,000 new or preserved housing units over 4 years
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First-time homebuyer assistance programs
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Tangled title work to help families unlock property equity
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Affordable home repairs and upgrades across Philly
As a lifelong Philadelphian and someone who works on the frontlines of real estate in this city every single day, I support smart investment into our neighborhoods. The H.O.M.E. initiative is aiming to do something long overdue and will help more families get access to quality, secure housing while preserving the homes and generational wealth that already exists here.
What You Need to Do Before July 1
If you’re in the middle of a transaction or planning to buy or sell in the next few months, timing matters. Here’s what to keep in mind:
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Close Before June 30: If you can, close by the end of June to avoid the higher tax rate.
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Talk With Your Agent or Attorney: Update your estimated closing costs and net sheets to reflect the change if you’re planning a settlement on or after July 1.
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Expect Slightly Higher Fees Across the Board: The City is also increasing recording fees by $3 for deeds, mortgages, and related filings. It’s a small bump but worth knowing if you’re budgeting tightly.
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Strategize With Your Realtor: Our team at Rarity Real Estate is already advising our clients on how to best structure their timelines to minimize the impact. Don’t wait until the last minute—get a game plan in place now.
How This Impacts the Market
Will this cool buyer demand? Likely not.
In a competitive housing market like Philly’s, with low inventory and strong buyer interest, a 0.3% increase isn’t going to stop most people from moving forward. But it will impact negotiations, closing cost contributions, and could slightly tighten affordability in already stretched price ranges. It’s also another reason why having a knowledgeable real estate agent and team in your corner matters more than ever. These details, although just small percentages, filing deadlines, new fees, can be the difference between a smooth transaction and a surprise at the closing table.
Final Thoughts from the Rarity Perspective
At Rarity Real Estate, our job isn’t just to help you buy or sell; we’re here to help you navigate every aspect of the deal with confidence and clarity. This tax increase is a small change, but one worth planning around. If you’re a buyer, seller, investor, or even just watching the market closely, don’t let this one sneak up on you. We’re here to walk you through every option, every timeline, and every scenario.
Have questions or want to talk about strategy?
Shoot us a message or contact your Rarity agent directly, we’re already preparing our clients, and we’d be happy to help you do the same. Let’s stay ahead of the market, not behind it.
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Jim Roche
CEO, Rarity Real Estate
www.RarityRE.com | @JimRoche_RE
